The extent to which member states make pertinent information about companies available to the public varies widely. This has to change if anything is to be learned from the Panama Papers scandal, writes Daniel Castro.

Daniel Castro is director of the Centre for Data Innovation, a think tank studying the intersection of data, technology, and public policy.

This week the International Consortium of Investigative Journalists (ICIJ) posted a searchable database of the names and addresses of the directors and shareholders from the more than 200,000 off-shore shell companies named in the Panama Papers, the now infamous documents leaked from the Panamanian law firm Mossack Fonseca.

By making this information public, the ICIJ hopes to enlist law enforcement agencies, financial regulators, citizen journalists and others to review the data and identify potential instances of tax evasion, money laundering, fraud, and other misdeeds. But this basic business information should not have been secret in the first place.

Unfortunately, most individuals do not have to go to Panama to hide behind opaque business reporting requirements, because while Europe has made some progress in making corporate data publicly available, it still has a long way to go before this information is truly open and accessible to the public.

The most recent attempt by EU policymakers to address the practice of using complex ownership structures to hide assets from public scrutiny came in the form of last year’s money laundering directive. The directive requires companies to register personal details of their beneficial owners—those who control and benefit from the company—but member states have been allowed too much discretion about who can have access to the data, in what format and at what cost. As a result, most EU member states are not moving quickly, or at all, to put the identities of beneficial owners into the public domain.

The UK has been the exception, and it has set the global standard for corporate transparency. Until recently, the government charged users £1 for every file downloaded from its central business registry, called Companies House, a service that costs users almost £9 million annually in fees. Now, however, all of the information stored in its database is freely available to the public as open data.

The registry includes important public data about companies, such as information on current and past officers, previous company names, annual returns and financial statements. The data is available both through a web interface for easy browsing as well as through bulk download in a standardised, machine-readable format to allow for offline analysis.

But the UK government has not stopped with these reforms. In addition, it has announced that it will be following the recommendations of the Financial Action Task Force, an inter-governmental body that includes most of the countries which are home to the major financial centres around the world and it will begin requiring companies to report beneficial ownership information to the central registry. The government plans to make this information publicly accessible by June 2016.

So far, few European countries have replicated this level of transparency. In fact, most European countries have failed to even make the most basic company data available. The 2015 Open Data Census assessed 20 EU countries and found that other than the UK, only Romania made the bare minimum—company name, unique identifier, and address—available as open data. And countries like Spain, where the minister of industry, energy and tourism resigned following leaked details about his involvement in an offshore company in the Bahamas, provide virtually no access to this data. This needs to change.

The European Commission should set out a policy goal aimed at achieving fully open data for registered company information by 2020. EU member states should modernise their business reporting requirements to collect electronically more complete information about companies registered in Europe, including information about beneficial ownership, and then make all non-sensitive information publicly available online in a standardised format and free of charge.

Countries should use existing global standards, such as the extensible business reporting language (XBRL) to exchange business information electronically. In addition, they should follow the recommendations of the Financial Stability Board, established by the G20, and begin using legal entity identifiers, an international system of codes that uniquely identifies a legal entity anywhere in the world.

Not only would these efforts to increase transparency provide a check on unlawful business activity, they would also provide businesses, financial institutions, and regulators more precise and consistent information about the vast network of relationships between different corporate entities—a necessary change to better understand risk across the European economy while minimising the compliance burden on the private sector.

The Panama Papers fallout should be a wakeup call to policymakers about the negative impact of weak corporate transparency laws and given the UK’s steady progress at publishing key public data about companies online, other European countries have no excuse not to follow their lead. By shedding light on corporate ownership, Europe can combat corruption, reduce financial crime and build greater trust and stability in its economy.